Difficult to move back to old pension system: PFRDA
The government might find it difficult to move back to general provident fund (GPF) pension system which was discontinued due to its huge fiscal burden, the pension fund regulator PFRDA said on Wednesday.
The comments came against the backdrop of government employee associations demanding restoration of old pension system which was replaced with contribution-based National Pension System (NPS) in 2004.
Labour Minister Bandaru Dattatreya last week had said that he would discuss the matter with Finance Minister Arun Jaitley. "The government brought in NPS because the old system was proving to be fiscally burdensome very much. So, because of that you can't go back to that. It will become very difficult for the government," PFRDA Chairman Hemant G Contractor said. The Pension Fund Regulatory and Development Authority of India (PFRDA) manages NPS.
Initially launched for central and state government employees, NPS now covers private institutions as well as workers in unorganised sector.
Government employee associations are saying that NPS requires employee contributions and has no benefits like insurance which were offered by old GPF pension system.